Can 'unfreezing' a card hurt your credit?

Erica Sandberg is a prominent personal finance authority and author of "Expecting Money: The Essential Financial Plan for New and Growing Families." She writes "Opening Credits," a weekly reader Q&A column about issues for people who are new to credit, for CreditCards.com.

Dear Opening Credits,A couple of years ago
I lost my job, and my finances took a major hit. Payments were consistently
late on several of my bills, and the credit card issued by my bank was
"frozen" due to late payments and a maxed out status. To make matters
worse, I defaulted on a private education loan and it went into collections (ouch).
In the past year, I have rehabilitated the loan, paid my bills and have been
getting my finances back in order; and though my credit score is still poor,
it's slowly -- like snail's pace slow -- inching back up. I am looking for ways to rebuild it more
quickly. I spoke with a representative at my bank about "unfreezing"
my frozen credit card, and she said it might be possible. (The card currently
has a $3,400 limit on it, and I've paid down the balance to around $2,000.) My
question is, if the card can be "thawed out," what kind of effect
would that have on my credit score, if any? Would it be better for me to just
forget about taking it out of the deep-freeze and get a secured credit card
instead? Thank you for your time! -- Andolina

Dear Andolina,
I must say, I'm loving
the imagery of a credit card imprisoned in ice. I also am happy that you seem
to be working your way out of such a deep and chilly financial problem.

Now what can you do to
maintain the momentum? Yes, I do suggest chipping your old account free
from the freezer and reactivating it when the issuer says you can. I get the impression
that the card isn't closed, but rather
suspended until you can reduce the balance.
You don't say how long you've had it, but it is usually best
to keep older accounts active. Doing so establishes history, and proof of longevity is good for a credit score. However, just having the card won't help a score, so when you've paid the debt down, charge with it again, making small, regular purchases and paying them off every month.

And speaking of credit
scores, it is a smart idea to know exactly what goes into them so you can be
systematic with rebuilding your rating. When you do that, you also organize
your financial life, which will help you not waste time and money as you're
driving those numbers up. So here's the scoop on FICO scores, the most commonly
used of all the credit scoring models:

Perfect your payment pattern. Thirty-five percent of a score depends on how you repay
your debts. If you never miss a cycle and you keep your accounts out of collection,
you're doing great. That you've removed the student loan from default status
and are paying regularly counts for a lot.

Delete debt.
You're on the right track with eliminating that credit card balance. Thirty
percent of the score assesses the amount of debt you owe in relation to the
amount you can borrow. As you pay it down, your score goes up.

Keep your cards. As
I mentioned, older accounts count more than new accounts. Fifteen percent of
the score factors in the date you opened the credit line, as well as when you
last used it.

Assemble assorted accounts. Mix it up! By proving that you can handle a wide variety of credit types, you'll satisfy this category worth 10 percent of your score.

Ease up on applications. Also, 10 percent of a FICO is the way you get credit in the
first place. Don't go crazy and apply for just anything. Only seek the loans
and lines of credit that you really need and will qualify for. A secured credit card is a fine idea, as you'll probably qualify and won't have to go through
the rejection and then reapplication process.

If you follow the FICO
scoring rules, chances are you'll also enjoy a financially healthy lifestyle,
too. Seems to me you're well on your way to doing just that -- slowly, maybe.
But surely? Most definitely.

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